Sunday, August 5, 2012

Are Arsenal Splashing the Cash at Last?

As we await the imminent announcement of Santiago Cazorla
from Malaga, there has been a lot of discussion on whether we are now looking
at a change in transfer policy from Arsene Wenger.

On July 4th, the media smelled blood with van
Persie’s statement that he will not be signing a new contract at Arsenal. Yet,
many were forced to stop short of making widespread accusation towards Wenger
as by this point (4 days into the transfer window) he had already secured the
signings of Ligue 1 top scorer Olivier Giroud and one of Bundesliga’s top
goal-scorers Lukas Podolski.

During the course of the past 7 years, there has been lots
of accusation at the over-reliance of youth and shopping in the bargain
basement. So what is different this year? Has Wenger’s philosophy changed from
investing in youth? Or perhaps there is more cash available at the club?

Back in early June in a supporters trust meeting, Ivan Gazidis,
the Arsenal Chief Executive, repeatedly stressed the importance of the
self-sustainable model of the club. Alarm bells were ringing as fans have been concerned
in the manner in which the club are heavily relying on UEFA to enforce
financial fair play. It is no secret that the club are not likely to have
substantial funds to compete financially with Europe’s big teams until atleast 2014
when the current sponsorship with Emirates expires.

So the question begs that with the handicap of having not as much resources
as our rivals, why is the club on this current spending spree? There needs to
be perspective when casting eye on Arsenal’s recent transfer dealings. Can the
acquisition of Podolski, Giroud and Cazorla be classed as “splashing the cash”?

Arsenal have acted very early in the transfer market,
conducting business in a lot of secrecy from the prying eyes of the North East.
The most effective of all weapons that the club possess is the Champions League
football next year. Players want the opportunity to compete among the best and
the club can offer that next season.

The backroom staff have been hard at work over the course of the
year. Gazidis and his team look to have stepped up their operations
significantly to make sure Arsenal can sign some top quality players without
being outdone by the rich boys. Credit not only has to be given to the
scouting network, but also those that conducted research and identified
available opportunities for the club to exploit.

German Efficiency

First there was the signing of Lukas Podolski from German
club FC Koln. The 26 year old striker had a torrid time when he played for German
outfit Bayern Munchen a few years ago. The idea that he doesn’t have the
mentality to play in a big club has stuck among many around Europe. However, by
his own admission, the move for to Munchen came too early in his career. Some
players hit the ground running when they are young while others take time to
mature and Podolski has found himself in the latter category. He doesn’t shy
away from admitting his attitude was not acceptable during his time at the
Allianz Arena but he has worked to put things right and became one of
Bundesliga’s most prolific strikers.

The fee paid for Podolski was in the region of £10m and his wages
are believed to be in the region of £90k a week. In comparison to the going
rate of a player with over 100 appearances for the German national team, it is
a good piece of business by Arsenal.

Same old Arsenal

Then there was the capture of Olivier Giroud from last
season’s surprise package Montpellier. Giroud’s signing was shrewd business by
the Gunners who capitalised on the €12m (~£9.6m) release clause of the Ligue 1
Golden boot winner. It is widely known that club’s around Europe have
nightmares about Arsenal calling in for their players. It is a due to the club
bidding bare minimum prices leaving the selling club being in a situation
whereby they are forced to sell as the player in question has their head
turned.

Montpellier’s president Louis Nicollin openly admitted his
frustration at the low release clause on the player’s contract. Despite
interest from clubs across Europe, Giroud favoured a move to the red half of
North London and Montpellier were forced to sell at the release clause rate at
what became Wenger’s second signing before the transfer window opened.

Struck Oil!

Finally came the long awaited signing of Santiago Cazorla from
debt stricken Spanish outfit Malaga. The deal has been equally if not even more
ruthless business by the club. Countless media and clubs across Europe have
been left surprised at the manner in which Arsenal not only capitalised on
Malaga’s dismal financial situation but also at the speed in which the club
closed the deal out.

The Cazorla signing is one that that very few could have
predicted. On the surface of it, this is a Spanish European cup winner with
over 40 appearances for a national side that boast players in the calibre of
Iniesta, Xavi and Fabregas. Furthermore, Cazorla only moved to Malaga a year
ago. As difficult it is to prise away a player in those circumstances, Malaga
were looking in excellent shape, securing a Champions League Qualification spot
in next year’s competition. With that in
mind, many clubs would consider it a waste of time and resources to make any
enquiry on the player let alone submit a formal bid.

As I mentioned earlier, Arsenal look to have done a lot of
research over the course of the year so Malaga’s financial reality would not
have been new information. The club secured negotiations and a deal for Cazorla
before Malaga’s financial state became apparent, while holding off late
attempts from Chelsea to hijack the deal.

Despite several figures being thrown around, the fee is believed
to be in the region of £11m plus £4m add ons. It’s a great price for a player
like Cazorla and a low fee due to Malaga’s request to pay the money up front
immediately so they can relieve some debt. It is not the norm to pay up whole
transfer fees straight away and usually requires a series of instalments. Arsenal
had the advantage of being able to pay money up front and in turn driving the
transfer value down.

Splashing the Cash?

So with Podolski at ~£10m, Giroud at ~£9.6m, and Cazorla at ~£15m,
Wenger has taken his summer spending to around £35m. Now if you consider that
Chelsea paid out £36m for Eden Hazard is this what we can call “splashing the
cash” or efficiency in the market?

Whereas Manchester City, Manchester United and Chelsea can spend
£35m on one player, Arsenal must get by spending that amount over 3 or 4
players in total. Wenger’s budget every year has been known to be around the
£40m although there has been massive debate in how much of that money has been
made available to the manager due poor commercial income.

Yet, the whole situation is not so simplistic. The club must still
sell before closing all transfer dealings for the summer and adhere to a
1-in-1-out policy.
Whether van Persie, Bendtner, Squillaci or all of them are shown the exit door,
it’s a continuous battle to balance the books in North London. One of the most
high profile casualty of such a policy was Juan Mata last year. While the fee
and terms were agreed with the player, the club could not close out the deal
until Fabregas’ move to Barcelona was finalised and wages were freed. This
allowed Chelsea to capitalise on the delay and Arsenal lost out on an excellent
player.

Arsenal look to have made no such mistakes this time. While Wenger
confirmed last week that Bendtner, Park and Squilacci will be leaving, the club
have taken no chances in securing the signing of Cazorla.

Though attention must now turn towards improving the defence,
Arsenal look like a club heading in the right direction. Now an exciting
Premier League season beckons for the Gunners.

1 comment:

I was thinking of a theory that Arsenal haven't even tapped into the TPA yet as they could have used the money from the sale of Queensland Road (£26M) + the money from the 2011-2012 CL tv rights money or the upcoming CL season's money to fund Giroud, Podolski & Cazorla. Would that then mean there is the £40 million left to spend? Looks good to me.

Question about commercial for 2014. Will the money increase in the 2013-2014 season or the one after?